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It may not be limited to Bangalore.

I haven't seen a fare breakup (base fare, time & distance) for a while now, and I'm a frequent user in Bangalore and Pune.

No transparency, you just get an upfront estimate and it's take it or leave it. I don't blame them entirely, weren't aggregators forced to provide upfront estimates instead of using variable surge pricing? End result, surge is still being applied but it's not transparent like before.:Frustrati

That's it!

It IS surge pricing.

I went through my previous rides and here is another bill - this time without any breakup. So seems like they provide a breakup only when you take a normal ride when surge isn't applicable.

UberPool invoice won't show you fare breakdown. All other categories show fare breakdown with Uber.
UberPool charges are calculated differently hence no breakdown.

Not true.

I've never used UberPool, and none of my Uber rides for a while have had fare breakdown mentioned. This is for rides in Bangalore and Pune. Not been to Delhi for a few months so can't comment.

Actually, I think the taxi or yellow cab business itself in India has a seriously flawed model, and the pricing simply doesn't reflect the true costs of a cab driver. There are some variations from one city to another - Delhi NCR has CNG bringing down fuel costs, but Bangalore has a very high Diesel cost + road tax.

If we take Bangalore as an example, and assume you buy a Etios (base variant), it will cost 7 lakhs ex-showroom. Let's assume you can buy it with cash (so that interest expense is zero).

The costs are:
1. Road Tax & Insurance (Annual)
2. Fuel, Maintenance & Repair
3. Depreciation.
4. Driver Margin (what he takes home after all the pain)

If the car runs for 1 lakh kms, and assume the value of the car falls by 50%, you have incurred Rs. 3.5 depreciation per km. Luckily, if you stretch it to 2 lakhs, and assume it drops to 25%, the depreciation costs are Rs. 2.625 per km. As the car ages, depreciation costs per km keeps decreasing.

Let's assume the fuel prices remain constant throughout. At about Rs. 60 per litre of diesel, and a mileage of 15 per litre in city traffic conditions, you get Rs.4 per km. Let's throw in a maintenance & repair cost of Rs. 1 per km to take the total to be Rs. 5 per km for item 2. The problem however is that these tend to increase as the car ages. For now, let's assume they don't.

A driver may be able to drive not more than 200 kms a day in Bangalore given the low average speeds, if he works for 10-12 hours, or at times more (inhuman working conditions). So, 5000 kms a month assuming some downtime like leaves, car service, repairs etc. For a year, about 60000 kms. Insurance is higher for yellow board, and is about 35000 (input from a cabbie). So, this is roughly Rs. 0.6 per km.

Every 40000 kms or so, the tyres need replacement. Assuming this costs 20000, it is 0.5 per km.

If a driver aims to make a net income of Rs. 15000 a month, this is Rs. 3 per km.

Total cost per km for a 2 lakh run, which will take 3 years and 4 months = 2.625 + 5 + 4*0.6 (for 4 years) + 5*0.5 (5 tyre changes) + 3 = Rs. 12.525 (almost Rs. 15.5 per km!!).

Total cost per km for a 1 lakh run, which will take 1 year 8 months = 3.5 + 5 + 2*0.6 + 2*0.5 + 3 = Rs. 13.2 per km.

Just to recover the capital costs of Rs. 7 lakhs,
- For a 1 lakh run, you need a margin of Rs. 7 per km. So, pricing should be at Rs. 22+.
- For a 2 lakh run, you need a margin of Rs. 3.5 per km. Pricing should be Rs. 17.

All these are assuming full downpayment. If you add the interest, it can be anywhere between Rs.0.3 to Rs.0.6 per km, it will take it slightly up.

With the current pricing structure in our taxi market, there is no way the driver can earn any profit anytime in his life. Delhi NCR is slightly better due to use of CNG which brings down fuel price considerably to Rs. 1.5 per km. Even there, it will not be sufficient.

With this dynamic, bring in Uber/Ola, who also charges a 25-30% commission on every run.

Uber and Ola have piled on a tremendous amount of misery on rural poor youth who came to big cities in hope of a dream of driving cabs.

Drivers would have been better off being a private driver to people. At least it would have resulted in a stable income of 15000 per month.

And this had happened.

http://www.ndtv.com/bangalore-news/w...uicide-1424256

I had been ferried by Bharathi once.

I am amazed that SBI and some of the finance companies got into reckless lending to Ola / Uber drivers. It should have been obvious to anyone with half a brain that the incomes that these drivers were making (driven by unsustainable incentives) were not real, and that incentives would come down well before the EMI on cars was paid back. So lending to these drivers (without large upfront margins that could account for the likely depreciation on foreclosed cars) was definitely a dumb decisions - and these lenders deserve what they get.

The same applies to "investors" who bought dozens of cars and deployed them for these services. They were playing a greater fool game - in the hope that they would recover their investment before the bubble burst - and deserve losses they make.

As for hardworking owner drivers, while they may not be making ridiculous salaries, I think the Ola Uber model is still superior to working as a driver for a tourist taxi company or driving a black and yellow. They may not make the ₹60 k they hoped for but even ₹30 k is a good salary for a cab driver - so they should be happy with that.

Finally, what about the smart money VCs? Well they are playing either the greater fool game or the long one. Loads of VCs have made profitable exits at the height of the valuation bubble. Their model is predicated on several failures being compensated by one or two multibaggers. And for those who recollect the dot com bubble, please note that Amazon is a 600 bagger since it's "over priced" IPO - so the question is which, if any of these companies, is led by a Jeff Bezos and going to create value 20 years from now.

Govt. should bring in law to stop companies paying out incentives from VC money. No incentives should be allowed if company is on operational loss.
Current situation is leading to multiple issues.

• These big companies with VC money is killing small players initially

• Once they capture the market and almost monopolise the business, they increase the cost on consumers and/or stop incentives provided to their vendors/partners

• These cab drivers mostly illiterates doesn't understand this model and suffer later leading to all strikes and chaos recently

What would be funny (if it wasn't so tragic) is nobody in the whole cycle seems to be making or saving money.

The aggregators are burning VC cash, drivers aren't making 'enough', customers are paying increasingly higher charges (claims of dirt cheap fares notwithstanding) and the lenders have a snowflake's chance in hell of recovering their dues.

Who wins?

Patience is the name of the game, rates have gone up 10% easily within the span of 1 day, without any justification. Now it may be that rates were low to begin with, unjustifiably low perhaps for the drivers and the company, but the fact also remains that if the riders were to at all pay full charges for the taxi service since day one, they'd have gone the Meru route with 500-1000 cabs all over the city with even lesser demand and not the ridiculous 50k numbers and lakhs of patrons that OLA and Uber had managed to touch briefly before becoming half (seized due to non payment).

I always wondered if Microsoft were making anything at all in the early 2000's up until 2010, rumors were that close to 90% of the operating systems worldwide were duplicated copies, it was as easy as borrowing the cd or burning it to share with another friend, I remember the man who sold us a desktop when I was kid, used to give literally every software free of cost, pre-installed and he sold close to 30 pieces a month, one copy of Windows 98/XP might have been duplicated like 500 times by a single vendor. Microsoft got people reeled in nicely, let us have the fun and today they charge close to Rs.10k+ for a pre-installed soft copy of the OS and about 20% more for the cd, in effect they've written the code and selling soft copies of it for Rs.10k/$150, let's mutiply that with almost every computer on earth that have been upgraded and its evident that the company is swimming in money, they have recovered every cent of loss with interest and how.

UBER will be much the same, being a product manager I'd be shivering to raise the cost even by 2% and I might succeed after much convincing, today people have to shell out close to 10% extra with no justification (I pay Rs.90/- exactly today for a trip that usually costed Rs.80-82/- and they don't see much drop in demand at all, yes thousands of cabbies have dropped out/abandoned their cabs but UBER makes more profits against perhaps a slight dip in demand today.

My guess is that in no time the rate per km will touch Rs.20/- exactly, much, much higher than the present price, and add the time waiting+surge and people should be paying close to Rs.150/- for a trip that earlier costed Rs.100/- and most of us wouldn't mind because the alternative is an autorickshaw, drivers of which will refuse 200 times before one finally agrees and self-driving which is anything but convenient these days, in the end the net cost of transport for someone spending Rs.10k might go to about Rs.13-15k and most people will not have a problem with that.

Its a watch and wait game, its for sure that the drivers will lose and we will end up paying more, but UBER as a company stands to gain BIG, if all its gambles and strategies come together in the end.

There is one more threat - self drive rentals.

I hired a self drive car from Revv on Friday. We made a trip from Dombivli to Pune. Then from the Pune home to another relative's place, followed by an airport run.

I drove on from Pune to Kolhapur and will drive back to Mumbai tomorrow. Tuesday morning I shall drive the car to the airport and drop it with the Revv representative.

This saved at least three to four cab trips - and if you include outstation, then quite a lot of business was lost to the self drive company.

Medianama.com has an article with researched numbers:

With the reduction in incentives and increase in commission by Uber and Ola, the honeymoon period seems to be over.
The cab drivers are resorting to distress sale of their cabs to end their association with Cab Aggregators.


In Bengaluru, driver-partners of cab aggregators resorting to cab distress sale

This was going to happen some day or the other. There was no way the incentives could continue forever. Unfortunately most of the drivers seem to have failed to take this into account before jumping in the bandwagon. Maybe they were lured by marketing and ads.

Also, as a side effect of the slowdown, I expect sales of cars which mainly cater to the taxi market (Xcent, Zest, Amaze, Datsun Go) to take a slight hit.